Tariff Wars and now Tariff Ceasefires Today

Since the 1^st February, just 10 days after President Trump’s inauguration, tariffs of 25% were announced for Canada and Mexico imports and for China, an extra 10% tariffs on top of 50% on solar cells and 25% on electric vehicle batteries, critical minerals, steel, and aluminum.  Canadian and Mexican tariffs were then postponed  for a month 2 days later.

Since then there have been numerous announcement on tariffs not just affecting the above nations but all imports to the USA.

Trade War

Yesterday, we saw the USA hike China tariffs to 125%.

Today, China has confirmed an increase in tariffs on USA goods/materials to 85% with a vow that China will not ‘back down’.

China and USA are now in a Trade War that both think they can win but we all be losers.

Tariff Ceasefire

Today, the USA has also confirmed it has postponed all tariffs, with the exception of China, where tariffs remain.

Comment

No doubt tariffs and counter measures will feature in the news and affect markets over the coming weeks.  Even the news of tariff suspension has pushed markets back up between 5-10% today, but remember these are only postponed, they are still on the table and China's have not been postponed, so expect more fireworks between China and the USA.

We repeat, we believe Mr Trump wants to get people to the negotiating table to protect US interests, reduce trade defecits and make the USA stronger again.  Many may not like it and many of you may think Mr Trump is a fool but have empathy and put yourself in his shoes:

• You have a friend that you keep giving them your maintenance jobs at home and your business premises and you pay them the going rate.
• You have a restaurant and your friend eats out elsewhere meaning you have to get a loan to keep your business open.
• Your spoiuse runs a mortgage business yet your friend did not come to your spouse for their mortgage but then they have go into trouble and come to your spouse to ask them to explain what mortgage they have and if they can help them or lend them some money to keep them going.
• Your need some work doing at the resturant and you give the work to your friend to keep them ‘afloat’, you then end up borrowing money yourself to keep your resturant afloat and pay them for the works.

What would you do?  Keep letting your friend ‘bleed you dry’?  We think not.